Be safe with an enduring power of attorney
In Queensland, there is no automatic appointment of a person to assume control of the financial matters or affairs of an adult with impaired capacity.
A family member can only administer the financial affairs of an adult who has lost capacity (“the principal”) if either:
- The principal has appointed an attorney for financial matters under an enduring power of attorney (EPA) before the principal’s capacity to deal with financial matters became impaired or,
- An administrator is appointed by the Queensland Civil and Administrative Tribunal (QCAT) to administer the principal’s financial matters.
Consider the case of a busy and successful plumber who had not made an EPA. He suffered brain damage in a work-related accident and became incapacitated.
His wife had no authority to operate on her husband’s business accounts. As a consequence, she could not access funds in his account and was therefore unable to meet his business expenses and mortgage payments as they fell due.
This situation, could have been avoided if an EPA had been put in place with savings of stress, time, costs and uncertainty.
An EPA should be viewed as an insurance policy. It is there for the protection of the principal if unfortunate events occur.
However an EPA can also be a tool of financial abuse and it’s often older people who are the victims.
People who are appointed by an EPA must know that they have an absolute and unconditional duty to act in the best interest of the person who appointed them.
If an appointed person acts improperly, he or she can be held personally and criminally liable.
When making an EPA you can take precautions to prevent such abuse, by considering the following:
- Carefully choose the person who will act as your attorney. This must be a person you can trust to act in your best interests, always.
- Make other people you know aware of who you have appointed so they know what is happening.
- Appointing two people and require that they act jointly instead of relying on one.
- Making it a condition of your EPA that someone else (for example, another family member or friend) receives copies of bank and other financial statement and regular reports from your Attorney.
- Requiring that a doctor must certify any “legal incapacity” before the EPA comes into force.
It’s better to be safe than sorry.
If you don’t have an Enduring Power of Attorney, act now to put one in place as you don’t know what’s around the corner.